Salary Certificate is a document issued to an employee by the working organization which is a proof to suggest that the employee has/had been in the organization for a particular salary for a particular period time. This is very important for an employee, as it helps them to produce proof of income whenever needed, especially for loans, Immigration etc.
In UAE, for any kind of loan, be it a Personal loan, Home loan, Car loan etc banks ask for Salary Certificate as a necessary document needed to be submitted along with the other documents like loan application, Passport(Expats), Emirates ID(UAE Nationals) and Bank Account statements.
There is a format to issue a Salary Certificate which differs from bank to bank. Every Bank follows a different format. But the basic format is including Name of the Employee, Salary, Working in the organization from, and the purpose of issuing the Salary Certificate with the Signature and designation of the Authorised Officer and Office stamp. The salary field in the Salary Certificate should include details like Basic Pay, DA(Dearness Allowance), HRA(House Rent Allowance), Medical Allowance.
There are two types of Salary Certificates – one is the Salary Certificate and the other is the Salary Certificate Letter. It has the same format but Salary Certificate is directed to a particular institution and in the case of loan rejection, it cannot be used in other banks. On the other hand, the Salary Certificate Letter is directed to a bank and when the bank rejects the loan the same can be used for some other bank again. Apart from this small difference, Salary Certificate and Salary Certificate Letter are essentially the same.
For a Personal Loan in UAE, Salary Certificate/ Salary Certificate Letter plays an important role. No Bank in UAE accepts your loan application without a Salary Certificate. Even if you show your bank statements about salary being credited, there should be a straightforward proof that clearly states the amount of salary and the employer that is paying it. This requirement is fulfilled by the Salary Certificate/Salary Certificate Letter.
About the author
Nikitha is a Senior Analyst at MyMoneySouq.com. She has been writing about personal finance, credit cards, mortgage, and other personal finance products in the UAE. Her work on Mortgage loans has been featured by the GulfNews and other popular Financial Blogs in the UAE.
